More on the Satellite Radio Merger

More on the Satellite Radio Merger

Let's look at the recent history of terrestrial and satellite radio in regards to "improving" their products. Sirius hires Howard Stern for $500 million, and he is arguably the highest rated radio personality in the world, and they get Martha Stewart. XM hires Opie and Anthony and Oprah. Traditional radio re-hires Imus and David Lee Roth (who I think lasted six weeks before being fired). Satellite has hundreds of commercial free channels. Traditional radio has 26.6 percent of every hour dedicated to commercials.

Both satellite companies have been hemorrhaging money. Why would they back off now? They have more incentive to grow now because of the operational efficiencies gained from this merger.

If you already had satellite radio, enjoyed the content, found it better than terrestrial radio and paid a monthly subscription for the privilege, then you obviously feel it had a superior value to traditional radio. Even if the satellite companies didn't "improve" their offerings, the merger would force the terrestrial radio operators to actually compete and improve their product.

There are only 17.5 million satellite radio subscribers. There are 190-plus million drivers in the U.S. with radios that in most of these cars receive free radio - which is now forced to compete in earnest for the first time in 70 years. The people who will benefit most from this merger don't even subscribe satellite radio.